G20 says in text will refrain from competitive devaluations

February 16, 2013|Reuters

MOSCOW (Reuters) - The Group of 20 nations vowed to refrain from competitive devaluations and move towards market-determined exchange rates in a joint communique that was due to be issued after talks in Moscow on Saturday.

"We will refrain from competitive devaluations," said the communique, which was thrashed out by finance officials on Friday night and seen by Reuters.

The text said that monetary policy should be directed towards domestic price stability and economic recovery - effectively giving a free pass to countries like Japan whose currencies have fallen as a result of expansive policies.

It contained a commitment to run credible medium-term fiscal strategy, but stopped short of setting specific goals.

This was a key U.S. demand, reflected in wording that medium-term fiscal consolidation should take into account near-term economic considerations and fiscal space.